South Korean stocks shed 0.75 percent on Monday amid growing expectations for a U.S. rate hike following better-than-expected job data in the world's largest economy, analysts said. The local currency tumbled against the U.S. dollar.

The benchmark Korea Composite Stock Price Index fell 15.37 points to 2,025.7. Trading volume was light at 427.73 million shares worth 5.92 trillion won ($5.1 billion), with losers far surpassing winners 694 to 138.

"Concerns over a U.S. rate hike weighed heavily on the market, with many large-cap shares closing down as a result," said Koh Seung-hee, an analyst at KDB Daewoo Securities Co. said. "Despite the overall downward, the drugmaking sector remained strong due to recent business deals."

The U.S. unveiled its latest jobs data last week, which far exceeded market estimates and raised expectations that the U.S. Fed could raise its interest rate in its meeting scheduled for December, a decision that could affect the financial market here, which depends heavily on foreign capital.

Institutions led the sell-off, unloading around 190 billion won worth of shares more than they sold.

Rumors over a merger among shipping heavyweights also served as a drag on the market.

Industry leader Hanjin Shipping closed down 4.76 percent at 4,700 won, while second-ranked Hyundai Merchant Marine plunged 13.78 percent to 5,130 won. The setbacks followed a media report that the government is leading efforts for a merger between the two.

Petrochemical shares added to the downward pressure as international oil prices remained low. No. 1 chemical maker LG Chem was down 2.47 percent to 296,500 won, while oil refinery S-Oil dropped 2.73 percent to 67,600 won. 

Retail and steel shares also ended in negative terrain, with Lotte Shopping and leading steel maker POSCO losing 6.41 percent and 2.2 percent, respectively.

A recent mega deal helped major drugmakers continue to rally.

Hanmi Pharm jumped 15.89 percent to 824,000 won, the second straight rally after a recent $4 billion license deal with French drugmaker Sanofi to develop diabetes treatments. After the market close on Monday, it also announced a 1 trillion won deal to export a diabetes and obesity treatment drug to Janssen.  

The local currency ended at 1,157.2 won against the greenback, down 15.3 won from Friday's close, as traders fretted over a possible U.S. rate increase. (Yonhap)